Maybe Large Companies are Fundamentally Flawed

http://www.jacksonfish.com/blog/2008/03/24/maybe-large-companies-are-fundamentally-flawed/

by twampss • 18 years ago

9 3 18 years ago

Good read, but misses the point that big (and especially public) companies became big by optimizing for profit and revenue growth, and shareholder returns. Employee and customer satisfaction are pursued only if they help drive those two goals.

hillel• 18 years ago

Actually, I think that is the point. Big companies are not necessarily always optimizing for employee and customer satisfaction. And frankly, with their size, creating a sustainable healthy internal environment becomes more and more difficult.

And although, as you say, the big guys don't always optimize around employee and customer satisfaction can you name one that would admit that?

One other note: small companies need to focus on profit as well or they won't have employees or customers for long.

ktheory• 18 years ago

Companies exist in large part to avoid transaction costs of using several autonomous market agents (the thesis of _The Nature of the Firm_ http://www.cerna.ensmp.fr/Enseignement/CoursEcoIndus/Support... by Ronald Coase, 1937)

Vertically integrated companies can avoid more transactions costs, making them more valuable.

The author doesn't seem to appreciate why large, vertically integrated companies are fundamentally valuable.

Maybe Large Companies are Fundamentally Flawed

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